#AskTheTaxWhiz: How do I know if my employer remits withheld taxes?
How do I know if my employer remits the taxes being withheld from my monthly salaries? What if they did not remit, do I have any liability? If my employer does not withhold taxes from my salaries, am I obliged to file and pay my income taxes?
You should receive a copy of the Bureau of Internal Revenue (BIR) Certificate of Compensation Payment/Tax Withheld (BIR Form 2316). Employers are required to issue this certificate to their employees on or before January 31 of the succeeding year, and to file the annual information return (BIR Form No. 1604-CF) to BIR.
As long as taxes are withheld from your compensation, it is the obligation of your employer to file and remit the withheld taxes using the Monthly Remittance Return of Income Taxes Withheld on Compensation (BIR Form 1601C).
Yes. If your employer refused or failed to withhold taxes on your salary, you are obliged to file and pay your income tax.
Employees are exempted from filing an income tax return, right? Are there instances wherein they are required to file?
Yes. Employees are qualified for substituted filing of income tax return, provided they receive purely compensation income (regardless of amount) from one employer in the Philippines during the taxable year, and the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the employer.
Yes. The following individuals are not qualified for substituted filing: (per RMC 1-2003)
- Individuals deriving compensation income from two or more employees, concurrently or successively at anytime during the taxable year
- Employees deriving compensation income, regardless of amount, whether from single/several employers during the calendar year, income tax of which has not been withheld correctly (i.e., tax due is not equal to the tax withheld) resulting in a collectible or refundable return
- Employees whose monthly gross compensation income does not exceed P5,000 ($11.79) or the statutory minimum wage, whichever is higher, and who opted for non-withholding of tax on said income
- Individuals deriving other non-business, non-profession-related income in addition to compensation not otherwise subject to final tax
- Individuals deriving purely compensation income from a single employer although income has been correctly subjected to withholding tax, but whose spouses are not entitled to substituted filing
- Non-resident aliens engaged in trade or business in the Philippines deriving purely compensation income or compensation income and other business or profession-related income
I have been employed (my first employer) in a company since 2012 and I resigned in July this year. My salary is about P15,000 ($335.32) per month. They gave me a tax refund. I was immediately employed in another company from July to October where I earned P12,000 ($268.39) (plus commission) per month. They also gave me a tax refund. Since November, I have been working part-time. I earn only about P4,000 ($89.47) a month. My question is: Do I still need to file an income tax return to consolidate all my earnings this 2013?
Yes. You are not qualified for substituted filing of income tax return. Therefore, you need to consolidate all your earnings for the taxable year and file income tax return (BIR Form 1700).
For those qualified for substituted filing, is it necessary to have BIR Form 2316 notarized? Can an employee file an ITR (BIR Form No. 1700) even if he is qualified for substituted filing?
No, it is not necessary to have BIR Form 2316 notarized for those qualified for substituted filing.
No, for taxable year 2002 and beyond, substituted filing is mandatory for qualified employees.
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Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon's tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at firstname.lastname@example.org.
$1 = P44.71